Rescued forge looks forward to firing up again

Latvia welcomed the sale of Liepajas metalurgs, the troubled steelworks once employing thousands that went belly-up last year, to Ukrainian firm KVV Group Friday, as state and company officials made hopeful remarks at a press conference.

Both Prime Minister Laimdota Straujuma and Finance Minister Andris Vilks hailed the outcome of the auction to KVV Group as a promising sign that the state will be able to recover all of the €67.4m in funds it sank into covering its debts prior to going under.

The premier said that she “hopes and believes the company’s reputation will be fully restored.”

FM Vilks went on to comment that the sale should signal that Ukrainian investors are “very welcome” in Latvia, and that now was the right time for Ukraine to move closer to the EU market. He cited the “reanimation” of Liepajas metalurgs as a “perfect example” of Latvia’s capability of coming back from the seemingly hopeless loss of a major manufacturer.

“This is a very valuable experience, which shows that Latvia can work its way through some very complicated problems,” Vilks said.

Liepaja mayor Uldis Sesks told information agency LETA Friday that the signing of the sales contract late Thursday was “the deal of the century.”

“This was the moment we were waiting for, putting an end to the uncertainty where Liepaja and Latvia were facing life without its largest factory. The Bank of Latvia even acknowledged that next year’s GDP estimates would depend on whether or not the plant would resume work,” he said.

Sesks added that he hoped KVV Group would recruit former employees of Liepajas metalurgs left without work since the mothballing of the plant last year.

Janis Grava of the local metalworkers’ trade union associated with Liepajas metalurgs told LETA that former employees were beginning to hear from the new owners inquiring about their possible willingness to return to their old jobs.

"I know a lot of people who have not found a new job. I believe that the company will not have to look for workers outside Liepaja. It would be better to re-employ someone who has already worked in the factory before than someone who has no prior experience," Grava added.

On his part, KVV Group owner Valery Krishtal called the deal “the most important contract we have ever signed.” He thanked the government and prime minister for their trust.

He stressed that the plant had been maintained in good shape, allowing the resumption of production sooner rather than later.

“We will relaunch the factory this year and try to reach maximum capacity within the next half-year to a year,” he said. At first only 230 people will be needed to man the production lines, later to double the amount with the opening of a second shift. By next year Krishtal said he hopes to have hired between 1200-1500 workers.

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Economy
Economy